At present, if an unfriendly user has access to a charge or credit card account number, the name of the card holder and the expiration date, then the unfriendly user can utilize the charge or credit card by telephone order, mail order or otherwise until the authorized use is reported by the card holder. Such unauthorized use of charge or credit cards has increased dramatically in recent years and has cost the industry more than a billion dollars.
Current practice of local telephone companies, long distance services and financial institutions is to utilize account numbers and personal identification numbers (PINs) which customers utilize to access their accounts. Some examples of such use and other anti-theft practices are described in U.S. Pat. No. 4,528,442 to Endo, U.S. Pat. No. 4,727,975 to Eisermann, U.S. Pat. No. 4,510,382 to Walter and U.S. Pat. No. 4,800,590 to Vaughan.
The Endo patent, U.S. Pat. No. 4,528,422, discloses a personal identification method where the user of a card is asked a predetermined set of questions which must be answered correctly in order to be granted access to the system. Each of the answers is initially provided by the authorized card user during a registration process. In one embodiment, the patent describes varying the order that the questions are asked, and varying which questions get asked each time a user tries to access the system.
Eisermann, U.S. Pat. No. 4,727,975, discloses a combination lock system where the combination is changed automatically each time the lock is used.
The Walter patent, U.S. Pat. No. 4,510,382, discloses a method for preventing use of unauthorized copies of magnetic cards. The method includes a step during which the serial number and the number of times the card has been used are read from the magnetic card by a presently used automatic service machine. Also read from each card, are the serial number of another card and the number of times the other card has been used, this latter information having been previously recorded onto the presently used magnetic card by the most recently used automatic service machine. The "other" card is preferably the card which happened to be used in the most recently used automatic service machine, just before the present card was used therein. The number of uses of the present card is then incremented and compared to a previous number of uses stored in the automatic service machine. If the number of uses is not greater for the present card, then a false card is detected.
The Vaughan patent, U.S. Pat. No. 4,800,590, discloses a computer access system for selectively granting access to a host computer. Passwords generated from PIN numbers are varied as a function of time and a pseudo-random number. The access system disclosed comprises a password generator and a lock computer responsive to passwords generated by the generator. If a password generated by the password generator matches a password separately generated by the lock computer, access to the host computer is granted. The password generator and the lock computer have corresponding pseudo-random number sequences stored in their respective memories. The password generator and the lock computer have synchronized clocks, which define time intervals. During any given time interval, entry of a PIN into the password generator will cause the password generator to generate a unique password from the random number sequence in memory and from time interval information provided by its clock. The user, by entering his/her PIN number, causes the so-generated password to be transmitted to the lock computer which independently generates a comparison password from the corresponding pseudo-random number sequence stored in its respective memory and from the time interval defined by its clock. If the two passwords match, access to the host computer is granted by the lock computer. Since the valid passwords change with each time interval, subsequent use of an intercepted password will not grant access to the computer.